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Intellectual Property and the implications of a “No Deal” Brexit

October 2018

With the possibility of a “no deal” Brexit looming, Irish businesses and, in particular, the holders of UK registered Intellectual Property (IP) rights need to consider the implications such a scenario may have on their IP rights and interests.  The following is a summary of recently published technical notices produced by the UK government on the potential impact of a no deal Brexit on IP rights.

Patents, SPCs and the Unified Patent Court

  • The UK government has stated its intention that UK registered patents will remain largely unaffected by its departure from the EU. All existing EU legislation pertaining to patents and other IP rights will be retained within the UK’s domestic legal system as part of the EU Withdrawal Act 2018.  The current system will therefore continue and operate without reference to the EU.
  • EU legislation on Supplementary Protection Certificates (SPCs) will be assimilated into UK law and the UK’s SPC regime will mirror that of the EU’s. No action will be required by those who hold or are applying for SPCs.
  • Whilst the UK government has ratified the Unified Patent Court (UPC) Agreement, its implementation is currently dependent on German ratification. Should the UPC Agreement be implemented, the UK may be obliged to withdraw from the unitary patent system and businesses may be precluded from using the UPC to protect and enforce their IP rights. The UK government has stated that it will “explore whether it is possible to remain within it”.

Copyright

  • As copyright law is primarily underpinned by international treaties, the existing copyright regime within the UK will largely continue as before. However, protection of copyright within the EU may be compromised.
  • Upon departure from the EU without a deal, the UK will be treated as a “third country” by EU member states and will lose the benefit of current reciprocal cross border copyright mechanisms currently enjoyed by the UK. For example, UK businesses may lose access to database rights within the European Economic Area (EEA), be precluded from access to certain online content within the EU and be infringing copyright by applying the orphan works exception.

Trade Marks and Designs

  • The holders of existing European Union Trade Marks (EUTMs) or registered community designs will be automatically granted a new UK-equivalent right upon Brexit. Therefore, existing EUTMs and registered community designs will continue to have force within the UK with equivalent rights.
  • Pending EU applicants will have 9 months from the date of Brexit in which they can apply for a UK equivalent right. Applicants for UK equivalent rights will be able to retain the priority date of their original EU application but must bear the cost of the new UK application.
  • The UK government also intends to create a new UK unregistered design right with equivalent rights to that of unregistered community design rights.

Exhaustion of IP Rights

  • In order to maintain continuity for businesses, the UK government has stated that it will continue to recognise the existing EEA exhaustion regime upon a no deal Brexit.
  • The current exhaustion regime provides that once goods have been sold with the right holders consent, the right holder cannot prevent those goods from being subsequently resold anywhere else within the EEA as the IP rights have been exhausted.
  • A “no deal Brexit” would mean that whilst there will be no change for those importing goods into the UK from EEA, importing goods into the EEA from the UK may require permission of the right holder, prior to importation. This is likely to lead to the greatest implications in terms of IP related effects.

Conclusion

It is important to note that, whilst the UK government has indicated that it intends to largely minimise the effect of Brexit on IP rights through the EU Withdrawal Act 2018, businesses must be alive to the inevitable likely future regulatory and legal divergence between the two jurisdictions.

The foregoing will be of particular relevance to Irish businesses who operate and hold IP rights within the UK.

Should specific advice be required on any of these issues, please contact Aoife Murphy, Caroline O’Connor or any member of our IP team.